Investing in dividend stocks can help you build a solid passive-income portfolio. Moreover, focusing on monthly dividend stars (stocks offering monthly payouts) with fundamentally strong businesses can help you meet your regular financial commitments and reinvest more frequently, thus enhancing overall returns in the long term.
With this background, here are the three TSX stocks for monthly passive income.
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TSX monthly dividend stock #1
Speaking of monthly dividend stars, Canadians could add SmartCentres REIT (TSX: SRU.UN) to their income portfolios. This integrated real estate investment trust (REIT) has durable payouts and a solid dividend payment history. Moreover, it offers a per-share dividend of $0.154, reflecting a high yield of about 7.7%.
The REIT operates a portfolio of mixed-use properties mainly focused on grocery-anchored shopping centres. These properties add stability to its operations and generate solid cash flows. They have a high-quality tenant base, solid occupancy rate, and high leasing demand.
Looking ahead, solid demand from new and existing tenants, increased leasing activity, favourable renewal rates, and high tenant retention will enable SmartCentres REIT to deliver solid net operating income (NOI). This will help the company to maintain its payouts in the coming years.
In addition, SmartCentres is focused on diversifying its portfolio through its mixed-use development, which will likely add new revenue streams and enhance its long-term growth prospects. Further, long-term leases and its valuable land bank provide a solid foundation for future growth.
TSX monthly dividend stock #2
Pizza Pizza Royalty (TSX: PZA) is another attractive TSX stock that offers monthly payouts and a high yield. The company operates and franchises a network of quick-service restaurants. Pizza Pizza is known for distributing all of its available cash to shareholders after retaining necessary reserves, making it a compelling income stock.
Currently, the company offers a monthly dividend of $0.077 per share, delivering an impressive yield of 7.3%.
Pizza Pizza has a diversified revenue base, including royalty income and food and beverage sales. Thanks to its growing revenues, Pizza Pizza is likely to sustain and enhance its dividend payouts. Further, the company is focused on increasing its same-store sales by driving guest traffic and boosting the average customer cheque. Expanding its restaurant network, strategic menu pricing initiatives, and using third-party food delivery platforms will allow Pizza Pizza to reach a broader customer base and further enhance its financials.
Pizza Pizza’s in-store pickup channel continues to gain traction. Further, its focus on convenience and innovation will likely contribute significantly to its future growth. In addition, the company’s ongoing investments in food quality and operational efficiency are expected to bolster its cash flows, driving its payouts.
TSX monthly dividend stock #3
Firm Capital Mortgage Investment Corporation (TSX: FC) is another monthly dividend star to add to your portfolio. This financial services company pays a monthly cash dividend of $0.078 per share. This equates to a high annualized yield of 8.2%, near the current market price.
Specializing in short-term real estate mortgage loans and real estate-related debt investments, Firm Capital has a conservative underwriting strategy. This adds stability to its financials and lowers loan loss risks. Its solid underwriting capabilities, diverse portfolio, and commitment to market-to-market valuation position the company well for sustained profitability, supporting its monthly dividend payouts.
Further, the non-bank lender focuses on underserved markets, which provides significant growth opportunities. Moreover, the firm generates significant earnings from interest, fees, and other income sources. These income streams add stability and support regular payouts.
